Truth is, we are selling. Maybe
we should feel guilty. Nope, don't
feel guilty. Certainly compared to
2007, our figures are down. Local
legend has that 2005 was our best
year. Not true. Our market had
$303,000,000 in closed residential
sales for 2005, but over $306,000,000
in 2007. So, compared to the best year
our market ever had, we are down.
However, we are ahead of virtually
every other year, and this is a good,
and yes, normal, market.
Still, like much of the rest of
the country, all of our markets are down, but areas such as Naples and Clark
Fork were suffering long before the rest of our market. In Clark Fork pricing
went up, much in relation to its proximity to Hope, which is one of our most
desirable areas. Unfortunately, sales there have not been great. In our MLS
market in the last two years, we have sold over $400,000,000 in inventory. Out
of that, only $15,000,000 has sold in the Clark Fork area. This is the lowest,
per size and population, of any area in North Idaho. (See the figures below)
What this means is, if you love the area, then it is great to buy there, but if
you don’t want to be upside down on price, and hope to have your investment
appreciate, other areas might be a good suggestion.
I was about the most successful
agent last year in the Hope area, selling five properties (out of 24 sold) in
Hope. This is one of my favorite parts of North Idaho. However, at this point, I
can’t suggest even this area as a great buy. You are farther away from
everything, including hospitals, shopping, and basic needs. Everything is more
expensive, and schools aren’t as good as the other areas. Still, for water
views, there are few places like Hope, Idaho. On the water properties there,
even in this down market still routinely sell for well over $1,000,000.
Naples, Bonners Ferry, and
Priest River have much better prices, and are more convenient to everything, yet
you can still get that great North Idaho feel.
Nearer Sandpoint there is even
more to offer, and buyers get water views for the same price or lower. If you
are looking for bottom line deals, then Naples and Priest River are going to
have better pricing.
Unfortunately, Coeur d’Alene
became one of the most popular growth cities of the last ten years. Beautiful
place, and cool stuff happening. But they overbuilt. A major news show called
Coeur d’Alene and Hawaii the two worst places to invest in real estate in the
nation. Still, it is such a vibrant place with good industry that the belief is
they will recover faster than other areas. Plus, there is so much inventory
available there, that there are very good opportunities for good buys. However,
if things don’t recover, there is already three years of inventory on the market
as of today. Again, in order not to be upside down, someone buying there will
have to be betting their market will recover. (See figures below)
Our market is also down, but
last year was the best year we have ever had. Our numbers are ahead of 2003 and
even 2004. We are having steady growth, but not nearly as fast as Coeur d’Alene.
Still, if one had to choose between Clark Fork and CdA (Coeur d’Alene), then by
all means go CdA. I report on all of these areas every month, and believe I have
good insight.
I think if you want more
big-city amenities, CdA is great. The projections for growth are for CdA to have
a 250,000 people in twenty years. It is already the bedroom community for
Spokane, and the metro area is approaching 1,000,000 within a decade. This is
not a big city, but I moved here to become part of small country charm, and get
away from that kind of life. I guess it is up to each of us to decide what we
are looking for.
All figures deemed accurate but not
guaranteed. Figures garnered from the Selkirk MLS
Sales for
1st and 2nd Quarter 2007 - $137,031,275 Average
Days on Market – 90
Median Sales Price - $244,000
Average Sales Price - $322,427
Sales for
1st and 2nd Quarter 2008 - $83,652,557 (This represents
only 60% of last year’s total)
Average Days on Market – 97
Median Sales Price - $217,500
Average Sales Price - $282,610
Sales for
the previous year per price range:
$100,000
- $300,000
1/1/07—7/21/07 270
1/1/08---7/21/08 196
$300,001
- $500,000
1/1/07---7/21/07 101
1/1/08---7/21/08 81
$500,001
- $750,000
1/1/07---7/21/07 50
1/1/08---7/21/08 13
The State of the Real Estate Market in
Sandpoint
The Real Estate market has certainly
taken a beating in the press lately.
It is true, there are areas of the
country that are definitely hurting,
but Idaho is NOT one of them. In fact,
in the study just released from the
National Association of Realtors, they
found that neighboring Washington
State has experienced a 30% REDUCTION
in the number of foreclosures
occurring in the state. Spokane was 64th
out of the 100 regional metro areas,
even better than Seattle’s ranking of
58. In fact, Seattle went up, then
began to decline, whereas Spokane
(which includes Coeur d’Alene) simply
declined. Our area of North Idaho is
even better, and sales are actually
ahead of last year, while foreclosures
have not yet affected our market, and
are virtually only marginally more
than in 2004. Let’s use Kootenai
County as our example:
Idaho has 264,768 mortgage loans.
3.46% are past due and .07% are ‘in
foreclosure’. Idaho’s sub-prime
numbers show 14.39% are past due and
5.52% are ‘in foreclosure’.
Kootenai County numbers show 228
properties are currently past due
(delinquent over 90 days but no
foreclosure proceedings currently
filed), 307 are “going into” auction
(proceedings have been filed giving
the home owner 120 days to either sell
or bring current their loan) and 90
are bank owned.
Kootenai County ‘notices of default’
are up in 2007 49.60% to a total of
558 from 2006’s total of 373. This is
still lower than our peak in 2001 of
781.
So what is really going on? With all
of the risky lending that has been
happening in the last few years, it
has brought buyers into the market
that probably were not really in a
position to purchase. They often used
adjustable rate mortgages to qualify
at lower rates and then when the rate
increased there had been enough market
appreciation that they could refinance
into a new loan and start the cycle
all over again. Now that market
appreciation has slowed and these
loans are resetting to higher rates,
many of these homeowners do not have
enough equity in their homes to
refinance again. This means some of
them are facing foreclosure because
they cannot afford the new, higher
mortgage payment.
Also, in many areas of the country
there has been a glut of building
which has flooded the market with
properties. In the Phoenix area alone,
they went from 4,400 properties on the
market last year to 44,000 properties
on the market this year! Consider our
areas. The front page of the Sunday
Spokesman Review just a couple weeks
ago headlined this regional issue.
With a metro population of 600,000,
Spokane has roughly 3,000 homes listed
for sale. Coeur d’Alene metro area,
with only 158,000 people has about the
same number! Our two county population
of less than 60,000 has roughly 1,000,
and many of those are in the Coeur
d’Alene area south of our region.
Another consideration is that a large
portion of the homes and condos we
have for sale are vacation homes, or
will be purchased as second homes, and
from January 1 to December 31, 2007,
our market had 936 homes and condos
sold. Not bad.
So what about the Greater
Sandpoint/North Idaho area? Our
economy remains incredibly strong with
a diversified economic base and strong
business growth. For our size, we have
an incredible number of companies
selling nationally and globally, and
with the new University of Idaho
breaking ground, and our tourist
business adding to the mix, our
possibilities are boundless. This
corporate base has companies like
Coldwater Creek growing in leaps and
bounds, and others such as Quest
Aircraft manufacturing have so many
orders that they are in the process of
hiring 200 new workers over the next
several months. This combined with our
geography (mountain ranges surrounding
us, with Schweitzer Ski Resort having
just come off a record year, and just
named as one of the top 25 ski resorts
in the nation, and the West’s second
largest lake in the middle), and
marginal traffic means that there is
only so much room to grow here, and
that has kept things under control. In
the last few years we have experienced
staggering appreciation rates, and
that may slow down, but it will remain
stable and steady. In fact, there has
become an increasingly large gap
between growths in home prices versus
growth in incomes. Huge appreciation
is nice when you are a homeowner for
sure, but it is also necessary for
things to slow down a bit so that
incomes can catch up.
One of our area’s biggest employers is
Coldwater Creek. Coldwater Creek laid
off 65 employees at several of its
facilities recently due to lagging
sales, but said the action was
intended to “position us for
sustainable growth,” and the company
remains committed to continuing its
operations in the Sandpoint and Coeur
d’Alene areas.
Despite recent layoffs and a downturn
in its sales, Coldwater Creek Inc. is
proceeding with an expansion project
that includes a $9 million, four-floor
office building and a $2 million
addition to its call center in
northwest Coeur d’Alene.
According to the Office of Federal
Housing Enterprise and Oversight which
lists appreciation rates for the last
five years, our rate of appreciation
is 8.42% over last year, and our five
year appreciation is 64.43%.
While our region is not a large enough
metro area to register on the radar of
the Office of Federal Housing
Enterprise and Oversight, the Selkirk
Association of Realtors shows that
homes in the Sandpoint/North Idaho MLS
area are still doing well.
Looking at the data below, while the
average sales price from 2005 to 2006
went up astronomically, we have drawn
back considerably in 2007. Still,
homes bought in 2005 have appreciated
nicely through October of 2007. The
median sales price is in a dead heat
with last year’s, and is considerably
more than 2005. Add to that that,
overall, the numbers of homes sold in
2007 is only down only 16% from our
best year ever, and virtually equal to
last year. Certainly our most recent
numbers are way ahead of 2002. All in
all, sales are good, Idaho is one of
the top appreciating states, and if
homes are priced in keeping with our
current market, days on market are
also very good.
So where do we go from here? FHA loans
will make a comeback for borrowers
with low and/or gifted funds for down
payments, rents will rise as more
renters come back into the market,
there may be a short term slow down in
home sales, however, there will be a
long term gain will be fewer defaults.
If you are a seller? Now more than
ever a full service agent is what you
need. The days of slapping a price on
something and having it sell instantly
are gone. Make sure that you have done
your home work. That means
pre-inspecting your home so that there
are not any surprises, staging it to
capture buyers the moment they walk in
the door, use professional pictures to
entice buyers on the internet, and
most importantly —PRICE IT RIGHT!
If you are a buyer? Now, more than
ever, is the time to buy. There are
more choices on the market which means
that you may actually be able to
negotiate well, and you will be
gaining on long term market
appreciation.
Bonner/Boundary County Real Estate
Trends, October 2006 to October 2007
Average / Median Selling Price
Average Days on Market
Number of Properties Sold
Area
1/1/2007-10/01/07
1/1/2006-10/01/06
1/1/2005-10/01/05
1/1/2002-10/01/02
1/1-10/01
200n7
1/1-10/01
2006
1/1-10/01
2005
1/1-10/01
2002
1/1-10/01
2007
1/1-10/01
2006
1/1-10/01
2005
1/1-10/01
2002
Homes-Sandpoint
$316,716 / $250,000
$374,313 / $259,500
$247,499 / $215,000
$146,987 / $123,750
105
90
51
154
142
151
165
108
Homes-Bonner Cty
$345,222 / $257,825
$339,283 / $255,500
$266,349 / $215,000
$170,758 / $145,000
97
90
70
154
510
505
611
386
Homes-Boundary Cty
$230,376 / $173,500
$205,120 / $182,000
$173,858 / $155,000
$170,758 / $145,000
93
88
104
104
114
122
179
62
Land-Sandpoint
$226,691 / $130,000
$192,276 / $152,750
$137,238 / $110,500
$248,800 /
$61,000
115
128
79
79
23
30
52
22
Land-Bonner Cty
$202,318 / $125,000
$180,806 / $122,500
$151,460 / $102,750
$102,249 /
$50,000
114
98
330
330
254
535
173
165
Land-Boundary Cty
$104,680 / 86,250
$82,956
/
$43,000
$71,111
/ $35,000
$67,210
/
$35,000
125
110
190
190
77
105
158
43
Looking at this data, while the
average sales price from 2005 to 2006
went up astronomically, we have drawn
back considerably in 2007. Still,
homes bought in 2005 have appreciated
nicely through October of 2007. The
median sales price is in a dead heat
with last year’s, and is considerably
more than 2005. Add to that, overall,
the numbers of homes sold in 2007 is
only down only 16% from our best year
ever, and virtually equal to last
year. Certainly our most recent
numbers are way ahead of 2002. All in
all, sales are good, Idaho is one of
the top appreciating states, and if
homes are priced in keeping with our
current market, days on market are
also very good.
So where do we go from here? FHA loans
will make a comeback for borrowers
with low and / or gifted funds for
down payments, rents will rise as more
renters come back into the market,
there may be a short term slow down in
home sales, however, there will be a
long term gain will be fewer defaults.
If you are a seller? Now more than
ever a full service agent is what you
need. The days of slapping a price on
something and having it sell instantly
are gone. Make sure that you have done
your homework. That means
pre-inspecting your home so that there
are not any surprises, staging it to
capture buyers the moment they walk in
the door, use professional pictures to
entice buyers on the internet and most
importantly —PRICE IT RIGHT!
If you are a buyer? Now, more than
ever, is the time to buy. There are
more choices on the market which means
that you may actually be able to
negotiate something and you will be
gaining on long term market
appreciation.
No matter what, know that I am here
for you as your market resource and
advocate. If you have questions about
the local market and how to better
accomplish your Real Estate goals,
give me a call at any time.
The
following information and graphs are
articles and market news, both locally
and nationally, that are intended to
inform and educate.
